Beyond Earnings: Applying the HOLT CFROI and Economic Profit FrameworkBeyond Earnings is targeted at investors, financial professionals, and students who want to improve their ability to analyze financial statements, forecast cash flows, and ultimately value a company. The authors demonstrate that reported earnings are easily gamed by accounting shenanigans and reveal how commonly used profitability measures such as return on equity can be misleading. Because earnings and P/E ratios are too unreliable for valuation, this book takes you beyond earnings and shows you how to apply the HOLT CFROI and Economic Profit framework in a step-by-step manner. A better measure of profitability results in improved capital allocation decisions and fundamental valuations. This ground-breaking book offers the first practical in-depth discussion of how profitability and growth fade, and shows how to put this information to work right away. The authors introduce their trailblazing Fundamental Pricing Model which includes fade as an adjustable value driver and can be used to value the impact of business model disruption. As the authors explain, the key to superior stock picking is understanding the expectations embedded in a stock’s price and having a clear view of whether the company can beat those expectations. The HOLT framework has been rigorously field tested for over 40 years by global investment professionals to help them make better stock picks and by corporate managers to understand the expectations embedded in their stock price. Beyond Earnings is an indispensable guide for investors who want to improve their odds of outperforming the competition. |
From inside the book
Results 1-5 of 59
... Sustainability of CAP Thought Experiment: The Valuation of Core Unlimited The Probability of Permanent Disruption The Characteristics of Competitive Advantage Fade Is a Value Driver The Fundamental Pricing Model 106 109 113 113 114 114 ...
... Sustainability of Growth Forecasting Growth Measuring a Firm's Sustainable Growth Rate Why HOLT Uses a Normalized Growth Rate Forecasting Growth: Near-Term and Long-Term Dynamics Conclusions Evaluating Market Expectations Key Learning ...
... sustainable level. The Pricing Puzzle can be elegantly stated as a simple but powerful formula that estimates a mature firm's value. We call this the Fundamental Pricing Model: - (ROC – g +f) (r – g +f) where B is book value, ROC is the ...
... sustainable competitive advantage for their firm. To be clear, short-term pursuit of profits should not dominate long-term value creation. Any tension that might arise between short-term and long-term objectives is resolvable when ...
... sustainable competitive advantage and selecting the most valuable portfolio of projects, strategies, and businesses from its palette of choices. Shareholder value will be maximized if the firm and its directors remain vigilant in this ...
Contents
Discounted Cash Flow and Economic Profit Valuation | 111 |
Value Driver Forecasting | 255 |
Index | 363 |
EULA | 384 |